Debt-laden Unitech Ltd, which remains enmeshed in a long-drawn legal battle to repay disgruntled home buyers, is selling its power transmission unit to a company promoted by the Shapoorji Pallonji Group.
Unitech Power Transmission Ltd will become a wholly-owned subsidiary of Sterling and Wilson Pvt. Ltd once the transaction is completed, Unitech said in a stock-market disclosure without disclosing the financial specifics of the transaction.
A person familiar with the transaction pegged the value of the deal at Rs 100 crore (around $14.5 million). Legal firm Cyril Amarchand Mangaldas advised Sterling and Wilson.
Unitech Power is engaged in manufacturing and installation of power transmission lines. It specialises in the domain of high-voltage power transmission lines up to 800 kilovolt (kV).
The company’s total revenue marginally increased from Rs 368.35 crore in the financial year 2015-16 to Rs 377.04 crore in 2016-17, according to Unitech's annual report. The 2017-18 annual report is not available. Net profit during the period rose from Rs 5.3 crore to Rs 6.35 crore.
The sale of Unitech Power comes amid the parent company’s struggle to refund the money of home buyers who bought apartments in Unitech projects. Unitech managing director Sanjay Chandra was arrested in April 2017 after home buyers filed a complaint against him for not handing over possession of their flats.
Sterling and Wilson houses the billionaire Pallonji Mistry-led Shapoorji Pallonji Group's global operations in the businesses of diesel generator sets, gas-based power plants, waste-to-energy, turnkey data centres, transmission and distribution and solar engineering, procurement and construction (EPC) business.
Sterling and Wilson currently operates across the Middle East, Africa, Australia, Europe, the US, and South America.
Last year, Bloomberg reported that the Shapoorji Pallonji Group was looking to raise about $1 billion (Rs 7,144 crore) by selling its stake in the solar business housed under Sterling and Wilson.